U.S.D. Best Since 2015

[Undaunted]

US dollar on track for best year since 2015

by Bloomberg News

December 28, 2024

The US dollar is headed for its best year in almost a decade as US economic strength reins in expectations for interest-rate cuts, while President-elect Donald Trump’s threats of harsh tariffs underpin bullish bets on the currency.

The Bloomberg Dollar Spot Index has risen more than 7% so far this year, the best run since 2015. All currencies in the developed world weakened against the greenback as other central banks had to support local economies.

“The main pillar of support for the US dollar this year has been the strength of the economy,” said Skylar Montgomery Koning, a foreign-exchange strategist at Barclays.

“That strength means the Fed is coalescing on a shallow cutting cycle that leaves interest rates in the US higher than elsewhere, helping sustain historically elevated dollar valuations.”

The dollar gauge touched the strongest level in over two years earlier this month when the Fed cut interest rates but signalled a slowdown in the pace of monetary easing.

Still, as Wall Street bets the dollar has more room to rise in 2025, global economic growth may improve later in the year, supporting other currencies and weighing on the dollar.

In 2024 so far, the yen, Norwegian krone and New Zealand dollar were the worst performers in the Group of 10, with each falling more than 10% against the greenback as of Dec 27. The euro has lost about 5.5% to trade near $1.04, with a growing number of strategists seeing the risk of the common currency reaching parity with the dollar next year.

The Bloomberg Dollar Spot Index held a slight advance on Friday to cap a fourth week of gains, rising alongside longer-term Treasury yields as traders evaluate the Fed’s monetary path and policies of the incoming Trump administration.

Non-commercial, speculative traders have steadily boosted bullish dollar bets in the run-up to and since the US election. They now hold some $28.2 billion in contracts tied to a future rise in the greenback, the most since May.

“Current dollar strength is consistent with incoming data, we do not think markets have fully incorporated our tariff expectations, and risks to our forecasts are still to the upside over the medium term,” Goldman Sachs analysts wrote in a note on Dec 20. “Especially if stronger sentiment translates into more durable US growth despite more protectionist measures.”

https://www.bangkokpost.com/business/ge ... since-2015

[Gaybutton]

I certainly hope it works out the way they are predicting, but we all know what kind of track record exchange rate predictions have had. For now I'll be in a wait and see mode.

[Jun]

I certainly hope it works out the way they are predicting, but we all know what kind of track record exchange rate predictions have had.

They're talking about 2024, so it's 99% of the way there.

[Undaunted]

[billyhouston]

Have a look at October 2022.

[Undaunted]

[Undaunted]

[2lz2p]

I used Wise this morning, 2 April, to transfer US$ to my Thai bank account. Their exchange rate was 34.201 to the dollar.

[Dodger]

Hard to imagine a stable trend these days.

It's almost like magic...

[Dodger]

With Trumps tariffs that were announced yesterday Thailand is getting hit with a whopping 34% tax. This is expected to effect Thailand's 2025 GDP by around 1.2%, thus weakening the baht against the USD a bit more as time moves forward. Works for me.

From what it looks like SE Asia got hit the worst because the U.S. knows that China will now increase exports to these countries and doesn't want to let China off the hook.

Not sure where any of this will end, but I must admit, I love seeing China getting nailed with 54%. Half of the products coming out of China are copyright infringements on U.S. products anyway - so it's about time they paid the piper.